Quick answer: The Malaysia Digital (MD) tax incentive is awarded through MDEC for qualifying technology activities and requires MD status, while the Global Services Hub (GS-Hub) incentive is awarded through MIDA for regional headquarters-type services to related companies. MDEC's tax incentive guidelines require that the applicant has not been granted any other Malaysian tax incentive for the same qualifying activity, so the choice is made per activity. Pick based on what the business actually does.
- The MD incentive is for qualifying technology activities, applied through MDEC.
- The GS-Hub incentive is for regional services, applied through MIDA.
- The MD incentive requires MD status. GS-Hub does not.
- No other Malaysian tax incentive can apply to the same MD qualifying activity.
- Rates, periods and conditions differ.
Side by Side
| Topic | MD tax incentive | GS-Hub incentive |
|---|---|---|
| Awarded through | MDEC, then NCI | MIDA, then NCI |
| For | Qualifying technology activities | Regional P&L, strategic planning, corporate development plus other services |
| MD status | Required | Not required |
| Rates | 10% (5% if more conditions met), 0% on IP income | Tier 1 5% or Tier 2 10% |
| Period | 10 consecutive years | 5 or 10 years for new company, 5 for existing |
| Application window | Until 31 December 2027 | 14 October 2023 to 31 December 2027 |
Which Fits Which Company
| Company | Likely route |
|---|---|
| Software, AI or cloud product company building in Malaysia | MD tax incentive, after MD status |
| Regional management centre serving group companies | GS-Hub |
| Company doing both | Separate activities and entities need careful planning |
The Same-Activity Rule
Under MDEC's guidelines, the applicant must not have been granted any other Malaysian tax incentive for the same qualifying activity. That rule applies to the activity, so a group can in principle use different incentives for different activities. Structure and documentation matter.
Questions to Ask
- What is the core revenue-earning activity?
- Does it match an MD technology area or the GS-Hub core activities?
- Do we serve related companies across a region?
- Can we meet the headcount, salary and capital conditions?
- Do we need MD status anyway for ownership and talent reasons?
Not sure where you stand? WhatsApp us. We will check it before you apply.
Mistakes
Applying for both on one activity
The same-activity rule blocks it.
Choosing by rate alone
Conditions decide whether you keep the rate.
Assuming GS-Hub needs MD status
It does not.
Three Scenarios
Scenario 1. A SaaS firm picks the MD incentive.
Scenario 2. A regional shared-services entity serving seven related companies explores GS-Hub.
Scenario 3. A group places its product arm and its regional management arm in separate entities.
How We Help
What we handle for you
Before you apply
- Test your activity, hiring plan and cost base against MDEC's conditions.
- Advise whether MD status, a tax incentive or both make sense for your business.
- Prepare your business plan and financial plan based on your company idea or business model.
Application
- Prepare and submit the application and answer MDEC's questions.
Why companies choose us
End-to-end under one roof
- We handle company incorporation, accounting and payroll, as well as MD status and expatriate pass applications, so your structure, records and hiring plan stay aligned.
- The company is set up correctly from day one.
We check before you invest
- We confirm eligibility, including whether you can hire the expatriates you need, before a foreign investor decides to incorporate in Malaysia.
- Neutral Consulting PLT is a Kuala Lumpur firm led by a Managing Partner who is a member of the Malaysian Institute of Accountants.
Frequently Asked Questions
Quick answers.
What is the difference between the MD and GS-Hub incentives?
MD is for qualifying technology activities through MDEC and needs MD status. GS-Hub is for regional services to related companies through MIDA.
Can I claim both on the same activity?
No. MDEC requires that no other Malaysian tax incentive has been granted for the same qualifying activity.
Does GS-Hub need MD status?
No.
Which gives the lower rate?
Both start at 5% under their top tiers, with different conditions.
How long does each last?
MD reduced rate runs 10 consecutive years. GS-Hub runs 5 or 10 years for a new company.
Who applies to whom?
MD applications go to MDEC. GS-Hub applications go to MIDA.
Are there other incentives?
Yes. Other Malaysian incentives exist, but eligibility for them is outside these two guidelines.
Which closes first?
Both application windows close on 31 December 2027.
What do I need for GS-Hub?
Core activities including regional management and strategic planning, plus at least two other services.
Does a start-up suit GS-Hub?
Rarely. GS-Hub targets regional service centres for related companies.
Can different group entities use different incentives?
In principle for different activities. Plan the structure carefully.
Can you help me choose?
Yes. We compare options against your business model and numbers.
Sources
Official sources
- MDEC, Guidelines on Malaysia Digital Status
- MDEC, Guidelines on Malaysia Digital (MD) Tax Incentive: New Investment
- MIDA, Global Services Hub (GS-Hub) Guideline
This page is general information, not legal advice. Agencies change their requirements, so confirm the current rules with MDEC, or with us, before you act. Checked November 2026.
Talk To Us Now
Thinking of applying for MD status? We will assess it first. All consultations are by video call.